The Dilemma and Breakthrough Path of the Application of

International Trade Law in the Cross-Border Trade of Digital

Products

Shijie Bu

Commercial and Economic Law School, Henan University of Economics and Law, Zhengzhou, Henan, China

Keywords: Digital Products, International Trade Law, Conflict Adjustment Mechanism of International Trade Law

System, International Trade.

Abstract: The scale and iteration of digital products are currently growing quickly, and the expansion of digital trade

has emerged as a key factor in the growth of international trade. However, due to the virtual nature of digital

products, rapid dissemination and fast update speed, international trade law will lead to the application of

digital products in cross-border trade practice. The problem of applying international trade law to the cross-

border commerce of digital goods can-not be successfully resolved because of the disparities in legal systems

across nations and the shortcomings of the system's conflict adjustment mechanism. The problem of applying

international trade law to the cross-border commerce of digital goods cannot be successfully resolved because

of the disparities in legal systems across nations and the shortcomings of the system's conflict adjustment

mechanism.

1 INTRODUCTION

Global digital commerce exports are expected to

increase from $4.99 trillion in 2020 to $7.13 trillion

in 2023, according to the Global Digital Commerce

Development Report 2024 (UNCTAD, 2024). It grew

by 42.9% in four years, with an average annual

growth rate of 10.7%, significantly outpacing the

growth of global exports of goods (5.6%) and services

(5.57%). Digital trade has become a new engine

driving global trade growth. In this context, the

international trade law system is faced with a series

of application difficulties, such as the conflict of law

enforcement jurisdiction caused by the different laws

of different countries. Failure to provide effective

legal guidance and protection in the face of new

problems will lead to a decline in the operability and

enforcement of national trade law in practice, which

will weaken its authority and credibility, and reduce

the will-ingress of countries to abide by and apply

international trade law, confusing national trade order

rules. Trade frictions and trade barriers between

countries are constantly escalating, hindering the

liberalization of international trade and undermining

the multilateral trading system. The cost of domestic

enterprises has increased, affecting the development

of the industry. Inhibiting global economic growth

and triggering a financial crisis. Increase the cost of

living for consumers, and their consumption choices

are greatly reduced. It is an unavoidable reality to

solve the dilemma of the international trade law

system under this change. In this regard, this paper

will focus on the cross-border trade law enforcement

jurisdiction conflict on digital products. This paper

summarizes the application status of law enforcement

jurisdiction for cross-border trade of digital products

and the reasons behind the conflicts and explores the

conflict adjustment mechanism of the existing

international trade law system and its application

dilemma. On this basis, the paper explains the

multiple needs that the international trade law system

needs to meet in the current state and summarizes the

optimization path of national trade law in the cross-

border digital products.

2 LITERATURE REVIEW

Traditionally, in the discussion of international trade

law, people often think that it should be the emissary

of maintaining international economic order,

balancing national interests and free trade. The

Bu, S.

The Dilemma and Breakthrough Path of the Application of International Trade Law in the Cross-Border Trade of Digital Products.

DOI: 10.5220/0014382200004859

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 1st International Conference on Politics, Law, and Social Science (ICPLSS 2025), pages 413-417

ISBN: 978-989-758-785-6

413

discussion on the dilemma of its application can be

roughly traced back to the mid-20th century when the

United Nations Convention on Contracts for the

International Sale of Goods (GISG) came into force,

scholars have begun to explore in depth the dilemmas

of the application of international trade law, such as

Article 1 of the Convention, which provides that it

applies to contracts for the sale of goods between

parties whose places of business are in different

States, regardless of the international and contractual

nature of the parties(United Nations, 1980). Since its

establishment, the World Trade Organization (WTO)

has actively improved its adjudication and

supervision mechanisms. Both promote the

unification of international trade rules, reduce

international trade disputes and provide a mechanism

for settlement, and promote global economic

development. However, GISG is not detailed enough

for the relevant provisions, and the scope of

application is very limited. The WTO is inefficient,

the implementation of rules is difficult, and there is a

lag in rules in the digital field.

Nowadays, with the rapid development of

economic globalization, relevant discussions are also

increasing. Some scholars have pointed out that the

reason for the conflict of enforcement jurisdiction in

the cross-border trade of digital products is the

complexity across different jurisdiction methods,

different regulatory standards and conflicting legal

frameworks (Aaron, 2024). In the face of the problem

that the existing conflict adjustment mechanism of the

international trade law system is difficult to adapt to

the existing changes, some scholars have proposed

ways to meet dual needs through fragmented

structures (Zheng, 2023). Some scholars have

explored the role of digital trade and international

trade law from the perspectives of jurisdiction, data

privacy, intellectual property and trade facilitation in

the digital age (Prasad, 2023). Some scholars believe

that in most trade issues, it is more difficult for

countries with large differences in national strength to

resolve conflicts than countries with similar national

strength (Conybeare, 1988).

Previous scholars' research on the conflict of law

enforcement jurisdiction in cross-border trade of

digital products often remained at the current

situation where the national trade law system cannot

adapt in the digital age and the problems of the

participating countries themselves, however, this

paper will focus on the conflict mediation mechanism

of the international trade law system, hoping to draw

the break-through path of the international trade law

system in the predicament of cross-border trade of

digital products from it.

This paper uses literature research methods,

comparative research methods and case analysis

methods. By collecting, organizing and analyzing

various domestic and foreign literature materials as

well as relevant cases for analysis and comparison,

the historical development, structural composition,

nature characteristics, functional background, value

significance, advantages and disadvantages of the

international trade law system are understood from

multiple dimensions. Then, the current application

status of the international trade law system in cross-

border trade of digital products is summarized and the

optimization path is obtained.

3 THE CURRENT APPLICATION

STATUS AND REASONS OF

CROSS-BORDER TRADE LAW

ON DIGITAL PRODUCTS

3.1 The Current Situation of

Jurisdictional Conflicts in

Cross-Border Trade Enforcement

of Digital Products Page

At present, conflicts of jurisdiction over cross-border

trade enforcement of digital products occur

frequently, covering a wide range of fields. For

instance, in the digital content industry, such as the

cross-border dissemination of digital products like

film and television and music, there are infringement

issues, and disputes over the jurisdiction of copyright

enforcement among different countries also

frequently arise (Reindl, 1997). Countries have

diverse issues regarding the application of

jurisdiction and lack unified standards. Some

countries take the location of the server of digital

products as the basis for jurisdiction, while some

countries in the European Union tend to take place

where digital products are consumed or where users

are located as the basis for jurisdiction.

In 2007, when the Belgian police were

investigating a case of online fraud, they requested

Yahoo of the United States to provide the registration

information of the involved email. Yahoo refused on

the grounds of the Electronic Communications

Privacy Act of the United States. Belgium, however,

insisted on the request based on its own Criminal

Procedure Law. Eventually, the Supreme Court of

Belgium ruled that Yahoo was required to provide the

information. Between 2013 and 2018, the US Drug

Enforcement Administration requested Microsoft to

ICPLSS 2025 - International Conference on Politics, Law, and Social Science

414

provide user email data stored on servers in Ireland.

Microsoft refused. The US Court of Appeals for the

Second Circuit initially supported Microsoft, but after

the US Congress passed the Cloud Act in 2018, the

US Supreme Court overturned the original ruling (De

Hert& Thumfart, 2018).

When comparing the jurisdiction conflict of

Yahoo Belgium and the Microsoft Ireland server

case, both focus on the issue of enforcement

jurisdiction in cross-border trade of digital products

and the differences in the application of relevant laws

between the two conflicting countries.

Fundamentally, it stems from the contradiction in the

application of the territorial principle and the personal

principle. The difference lies in the fact that the

former requires companies from other countries in

different locations to provide digital products, while

the latter requires domestic companies in different

locations to provide digital products. The

contradictions involved have different scopes of

influence. Furthermore, the impact of Yahoo

Belgium's jurisdictional conflict is mainly

concentrated in the European region, which has

caused a worldwide sensation with the introduction of

the Cloud Act.

In short, the current situation of jurisdictional

conflicts in cross-border trade of digital products is

mainly reflected in the disputes caused by the

inconsistent application of laws between China and

other countries in cross-border data trade among

multinational companies. Moreover, depending on

the influence of the measures taken by each country

in the case, the impact of this conflict on the global

trade order shows a positive correlation trend.

3.2 The Reasons for the Conflict in the

Application of Jurisdiction in

Cross-Border Trade Enforcement

of Digital Products

Objectively speaking, the reasons for the conflict in

the application of jurisdiction for cross-border trade

law enforcement of digital products stem from the

characteristics of digital products, mainly reflected in

their virtuality, rapid dissemination, and fast update

speed, etc. Digital products have no specific form.

Their dissemination is not disturbed by time and

space factors. Moreover, due to fierce market

competition, the main objects such as mobile phones

and computers are constantly updated to attract

consumers. As secondary objects, digital products

need to be continuously iterated and updated whether

to adapt to the updates of the main objects or to the

development of The Times. Due to the above

characteristics of digital products, their cross-border

trade costs are much lower than those of the

corresponding physical products and the trade mode

is also more convenient. However, at the same time,

it will also cause regulatory problems.

Subjectively speaking, the differences in legal

systems among countries are also the key reason for

the re-introduction of the application of law

enforcement jurisdiction in cross-border trade of

digital products. The European Union strictly protects

the rights of personal data through the General Data

Protection Regulation (GDPR), which has established

strict regulations on the collection, storage,

transmission and application of personal data, and

emphasizes the rights of data subjects. It also requires

data controllers and recipients to have the ability to

protect data security. Compared with the European

Union, American law is more decentralized and

emphasizes industry self-discipline. There is no

unified law among the states, and related behaviors

such as data processing are regulated through industry

associations (De Búrca& Scott, 2006). In cross-

border trade of digital products, although the United

States and the European Union have reached

agreements such as the Transatlantic Data Privacy

Framework to coordinate data between the two sides,

disputes still exist.

4 THE REGULATORY

MECHANISM AND

OPTIMIZATION PATH OF

DIGITAL PRODUCT TRADE

LAW

4.1 The Conflict Mediation Mechanism

of the International Trade Law

System and Its Application

Dilemmas

4.1.1 The Current Situation of the Conflict

Mediation Mechanism in the

International Trade Law System

The international trade law system has the nature of

internationality, comprehensiveness and dynamics,

and needs to meet multiple demands such as

coordinating conflicts of national interests, following

the development and changes of The Times, ensuring

the fair advancement of trade, and adhering to

sustainable development.

The Dilemma and Breakthrough Path of the Application of International Trade Law in the Cross-Border Trade of Digital Products

415

Since World War II, the rule of law in

international trade has been in an unprecedented state

of crisis. International protectionism is the primary

cause of the current crisis in the rule of law in

international trade. It is still necessary to use the rule

of law to overcome the current problem. The essence

of the current international trade crisis is caused by

the imperfection and insufficiency of the

development of the rule of law in international trade

(Liu, 2020). WTO DSM procedure, ICJ's decisions,

international arbitration, and other processes are

currently the principal conflict mediation tools in the

international trade law system. But the WTO dispute

resolution process has been in a state of paralysis

since 2017. Conflict mediation procedures like

international arbitration and ICJ have been unable to

effectively mediate disputes within the framework of

international trade law because of its own difficulties.

The current international trade problem can only be

resolved in this evolving environment by applying the

principles and techniques of the rule of law.

4.1.2 The Predicament of the Application

of Conflict Mediation Mechanisms

in the International Trade Law

System

The WTO DSM mechanism has the following

application predicaments. First, the interference from

political factors, the political relations between

international protectionism and the members of the

WTO. The existence of protectionism will lead to the

decline of the authority of WTO DSM mechanism

and hinder its reform process. At the same time, it will

also prompt other countries to adopt trade protection

measures such as anti-dumping, anti-subsidy and

raising trade barriers to ensure the normal

development of their own economies. However, there

is a good chance that this action will lead to

international trade disputes and add to the WTO

dispute resolution mechanism's workload. Second,

some laws are not covered and applicable since the

WTO's standards are not flexible enough to keep up

with the growth of digital trade. New trade areas like

e-commerce and digital trade are constantly

developing. WTO DSM mechanism is unable to

make reasonable rulings and guarantees when

disputes arise in these fields, which affects their

development. Meanwhile, they mainly focus on the

application of legal rules and are unable to handle

disputes caused by multiple factors. For instance, in

the case of genetically modified meat products in the

United States and the European Union, apart from

involving food safety technologies, historical and

cultural factors as well as political factors are also

involved. The WTO DSM mechanism is difficult to

handle comprehensively merely by relying on the

application of legal rules, which deteriorates the

relationship between the two sides (Jackson et al.,

2000).

Two application dilemmas pertaining to ICJ's

adjudication system are as follows. The first is that

the jurisdiction of ICJ usually requires the consent of

the parties to the dispute. Some countries are reluctant

to involve ICJ in the coordination of disputes due to

factors such as limited sovereignty and uncertainty

about the outcome of the ruling, resulting in the

inability of ICJ to mediate some important conflicts

in international trade law. Secondly, the litigation

procedures of ICJ's adjudication system are very

complex. In addition to the basic litigation

procedures, the entire litigation process will also

involve the interpretation and application of many

legal issues as well as the handling of unexpected

situations. Any problem in any link will affect the

final trial of the case, making the litigation procedures

of ICJ very complicated.

The main problem existing in the international

arbitration system is that there are many arbitration

institutions internationally at present, but their

systems are not unified. Choosing different

arbitration institutions will lead to different

arbitration results, greatly increasing the difficulty for

the parties to make a choice, hindering

communication and cooperation in the industry, and

affecting the order of international trade negotiations.

4.2 The Optimization Path of Law

Enforcement Jurisdiction for

Cross-Border Trade of Digital

Products

The first step in resolving WTO DSM mechanism's

application dilemma should be to lessen political

influence on it, steadfastly oppose protectionism, and

grant developing and underdeveloped nations

preferential treatment to restore a comparatively

equitable state of global trade. This study argues that

digital tools like artificial intelligence can be used to

improve the efficiency of updates in response to the

problem that regulations cannot closely adapt to the

times. To lessen the likelihood of mistakes in artificial

intelligence regulations, the relevant departments

must regularly evaluate the rules. Promoting

international legislation and strengthening national

authority over ICJ should be the first steps in

resolving the application dilemma of the court's

adjudication mechanism. This will allow nations to

ICPLSS 2025 - International Conference on Politics, Law, and Social Science

416

willingly submit disputes to the court for a resolution.

Secondly, it is necessary to optimize the litigation

procedures. ICJ's previous adjudication process was

quite onerous. To improve litigation efficiency, I

suggest using artificial intelligence to automatically

evaluate and process pertinent documents. The

internation-al community has been working to

encourage coordination and unification of

international arbitration to lessen the detrimental

effects that the inconsistent rules of different

international arbitration tribunals have on the global

trade order. The effectiveness and equity of

arbitration have increased because of the creation of

additional laws, such as the United Nations

Commission on International Trade Law's Model

Law on International Commercial Arbitration, and

the encouragement of collaboration and

communication between arbitration organizations.

This article, however, maintains that to further

advance the function of international trade arbitration

rules in the settlement of international trade disputes,

a specialized agency for oversight can be developed.

5 CONCLUSION

This research report starts with the current situation

of jurisdictional conflicts in cross-border trade

enforcement of digital products, analyzes its causes,

and introduces the conflict mediation mechanisms of

the international trade law system and their

application predicaments. By proposing

corresponding optimization plans for the application

predicaments of the three mediation mechanisms in

the international trade law system-WTO DSM

mechanism, ICJ's decisions, and international

arbitration.

Among them, to deal with the application

predicament of WTO DSM mechanism, the first step

should be to reduce the interference of political

factors, give preferential treatment to developing

countries and backward countries and conduct regular

reviews and updates. Artificial intelligence can be

utilized to improve the update efficiency. To address

the application predicament of the adjudication

mechanism of ICJ, efforts should be made to actively

promote international legislation. Enhance

recognition of that by various countries, enable their

resources to accept the rulings of ICJ, and optimize

litigation procedures. Utilize artificial intelligence to

quickly retrieve legal provisions, automatically

analyze and process relevant documents, and

accelerate the pace of litigation. However, this study

also has certain limitations. Due to the limitations of

data acquisition and the limited number of cases, the

depth and breadth of this research report need to be

further deepened. Especially, this research report

does not fully explain the complex relationship of the

international trade law system in digital cross-border

trade. It is hoped that further in-depth research on this

issue can be conducted in the future.

REFERENCES

Aaron Hall. 2024. Legal Challenges in Enforcing

Competition Law in Cross-Border Transactions. Aaron

Hall.https://aaronhall.com/legal-challenges-in-

enforcing-competition-law-in-cross-border-

transactions/

Conybeare, J.A. 1988. Managing International Trade

Conflicts: Explanations and Prescription. Journal of

International Affairs 75-91.

De Búrca, G. & Scott, J. (Eds.). 2006. Law and New

Governance in the EU and the US. Bloomsbury

Publishing.

De Hert, P. et al. 2018. Legal Arguments Used in Courts

Regarding Territoriality and Cross-Border Production

Orders: From Yahoo Belgium to Microsoft Ireland.

New Journal of European Criminal Law 9(3): 326-352.

Jackson, J.H. et al. 2000. The Role and Effectiveness of

WTO DSM Mechanism [with Comments and

Discussion]. Brookings Trade Forum 179-236.

Liu, J. 2020. The Crisis of International Trade Rule of Law

and the Path to Overcoming It. Journal of Law 41(1):

18-29.

Prasad, R. 2023. Cyber Borderlines: Exploring the Interplay

Between E-commerce and International Trade Law.

Studies in Law and Justice 2(4): 1-9.

Reindl, A.P. 1997. Choosing Law in Cyberspace:

Journal of International Law 19: 799.

United Nations. 1980. United Nations Convention on

Contracts for the International Sale of Goods.

http://www.mofcom.gov.cn/article/zhongyts/ci/200207

/20020700032134.shtml

United Nations Conference on Trade and Development

(UNCTAD). 2024. Digital Economy Report 2024.

https://unctad.org/publication/digital-economy-report-

2024

Zheng, Y. 2023. The Fragmented Structure of the

International Trade Law System: Historical Changes,

Principal Contradictions and China's Countermeasures.

Journal of International Economic Law (3): 61-76.

The Dilemma and Breakthrough Path of the Application of International Trade Law in the Cross-Border Trade of Digital Products

417